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Automatic Vending Market Report 2006
Key Note Publications Ltd, Feb 2006
Sales of products through vending machines increased by 3.1% in 2005, to £3.42bn. The number of vending machines in operation in the UK also rose in 2005, reaching 1.2 million, an increase of 3.4% on 2004. Sales growth in the vending market between 2001 and 2005 outperformed the increase in household expenditure on food and non-alcoholic beverages over the same period.
The three main sectors of the vending market are refreshment machines, cigarette and tobacco machines, and other vending machines. The largest sector is refreshment machines, which includes hot and cold drinks, snacks, confectionery, sandwiches and meals. The fastest-growing sector between 2001 and 2005 was other machines, which includes a wide range of non-food and beverage items, such as newspapers and magazines, personal care products and condoms. Sales of cigarettes through vending machines have demonstrated the slowest rate of growth since 2001, partly due to health concerns and the voluntary removal of cigarette machines from some locations by operators.
Restrictions on smoking in public places are expected to have a significant impact on the cigarette vending sector — and particularly those located in public houses — when the government measures are introduced in 2007. The ban is partial at the moment and will only affect public houses that serve food. However, if the ban eventually becomes full, then cigarette machines will need to be removed from all public houses. Another concern for the vending industry is the government's decision to ban vending machines from selling certain types of unhealthy foods in schools from 2006. Many of the leading vending operators have already changed the foods they sell in their school-based machines to healthier alternatives.
Vending sales are continuing to benefit from consumer demands for convenience and the trend towards snacking. Many purchases from vending machines are also impulse purchases, and the siting of vending machines in a wider range of locations has helped to encourage the impulse spender.
It is forecast that the sale of products though vending machines will continue in the second half of the decade, as the number of machines in use continues to increase and the range of products that can be purchased via vending machines continues to widen. Technological developments involving cashless payment systems will also help to develop the market and Internet-based vending technologies will become more established.
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